2019 (3) TMI 54 - AT - Customs

Valuation of imported goods - straw applicator 30 - bent foil treator - old and used goods or not? - value enhanced based on contemporaneous data - Held that - At different places, averments are made that the goods are old and second hand and also that these machines are new. - We, therefore, do not find that the certificate to be a credible evidence of the condition of the goods. Nevertheless, the report of the examination by the docks unit is available and nothing has been brought on record to controvert the finding therein on behalf of the appellant herein - thus, the goods are not second hand as claimed by the appellant. Determination of the value of the goods - Held that - The value adopted for assessment straw applicator has not been challenged and it is only the finding on the condition that has been contested along with the judgement by which bent foil treator has been re-assessed. With our finding of goods not being second hand , the absence of challenge to the enhanced value of straw applicator renders a finality to the assessment. The impugned order has relied upon on import whose applicability has not been controverted with acceptable evidence to the contrary - Insofar as bent foil treator is concerned, the enhancement suffers from incompatibility with the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The valuation adopted for straw applicator 30 alone survives. The adoption of enhanced value is based on an examination report of the customs officials. There is nothing on record to evidence that there has been a deliberate misdeclaration on the part of the importer and, even if the consequence of such mis-declaration may have benefitted them, that does not provide sufficient grounds to invoke section 111(m) of Customs Act, 1962. The interest of justice would be best served by setting aside the confiscation and penalty - the appeal is allowed except to the extent of confirming the duty liability arising from the enhanced value of straw applicator 30 - appeal allowed in part.

Summary

Issues involved: Import of 'straw applicator 30' and 'bent foil treator' declared as 'old and used' but found to be new, re-determination of assessable value, confiscation of goods, imposition of fine and penalty, challenge to assessment and valuation, application of Customs Valuation Rules.

Analysis:

1. Import of 'straw applicator 30' and 'bent foil treator':
The case involved the import of 'straw applicator 30' and 'bent foil treator' declared as 'old and used' but found to be new upon examination. The original authority re-determined the assessable value of these goods under the Customs Valuation Rules, leading to confiscation of goods and imposition of fines and penalties.

2. Challenge to assessment and valuation:
The appellant contended that the goods were 'second hand' and disputed the assessment based on contemporaneous data. The appellant argued against the proportionate increase applied to the value of 'bent foil treator' under rule 9 of Customs Valuation Rules, stating it did not meet the criteria of 'best judgment' as mandated.

3. Determining the condition of goods:
The Tribunal examined the certificate of a chartered engineer and the examination report by customs officials. The Tribunal found discrepancies in the engineer's certificate, ultimately concluding that the goods were not 'second hand' as claimed by the appellant.

4. Valuation of goods and application of Customs Valuation Rules:
The Tribunal upheld the enhanced value assessment of 'straw applicator 30' based on customs officials' examination report. However, the Tribunal found the re-assessment of 'bent foil treator' lacked compliance with Customs Valuation Rules, specifically noting the incompatibility with the residual method under rule 9.

5. Confiscation and penalty imposition:
The Tribunal observed no deliberate misdeclaration by the importer and noted that duties were paid in full. As a result, the Tribunal set aside the confiscation and penalty, allowing the appeal except for confirming the duty liability arising from the enhanced value of 'straw applicator 30'.

6. Conclusion:
The Tribunal, in its judgment delivered on 28-02-2019, found in favor of the appellant on various grounds, including the condition of goods, valuation assessment, and the application of Customs Valuation Rules. The interest of justice was deemed best served by setting aside the confiscation and penalty, except for the duty liability related to 'straw applicator 30'.

This detailed analysis provides a comprehensive overview of the issues involved in the legal judgment, highlighting the key arguments, findings, and conclusions reached by the Tribunal in the case.